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Monthly Archives: January 2014

Good evening everyone. This week’s issue of PlaneBusiness Banter is now posted! Finally! Apologies for the rather late posting this week. Moi came down with the flu on Sunday and well, my mind was pretty much mush until about noon on Wednesday. Considering this was a big earnings week with coverage of four airlines, including Delta Air Lines, United Airlines, Southwest Airlines and Alaska Air Group, not to mention those airlines that reported THIS week, including American Airlines, well, you can see what I was up against. And why I strongly considered never getting out of bed. At all.

We also get you updated on the latest DOJ settlement-related news. Yes, Southwest Airlines is clearly the big winner in the slot divestiture sweepstakes.

We had some union-related news this week, as the Association of Professional Flight Attendants, Association of Flight Attendants and American Airlines announced that the three had agreed on the terms of a bargaining agreement. The deal will see flight attendants at US Airways, who are currently represented by AFA, move over to APFA, if approved by the US Airways flight attendant group. That group will also be voting on the proposed fast track bargaining agreement that has been agreed upon. That agreement is designed to produce a new joint contract for the flight attendants at American no later than next spring.

The Air Line Pilots Association was also in the news over the last week or so. A number of subscribers seemed to believe that the recent $53 million settlement in the TWA pilot lawsuit would adversely affect the union. This is not the case. In fact, dues for ALPA pilots were just reduced in January. That is not going to change. We’ll dissect the situation for you.

Airline stocks had a rough week for the week ending 1.24.14, but this week was better – in no small part as a result of the very positive “buzz” American Airlines created on Wall Street with its earnings. Analysts liked what they saw. A lot. Oh and American CEO Doug Parker is one brave man. He went on Mad Money with Jim Cramer Wednesday. Live!

But this week the big news is earnings. We tell you why Delta is still the leader of the pack; why Southwest mystifies us; why Alaska Airlines is one hell of a great operation (and a cash cow to boot) and how United Airlines is still struggling with its transition issues.

This week we’re talking about the deal United Airlines announced Wednesday with the Continental AFA MEC. It guarantees a spot at the Continental operation for those sUAL flight attendants who are on the furlough list. Bold courageous move on the part of the CAL AFA MEC, and the airline for that matter. Great for the flight attendants whose jobs were in jeopardy. Nobody likes to see jobs go away. A win-win. Kudos!

We’re also talking about Sabre. The company filed its IPO registration papers with the SEC this week. The thing about private companies filing for an IPO? They have to come clean about all that stuff they previously didn’t have to talk about. Including the fact the company hasn’t been profitable since 2008. Or that American Airlines got a bigger check than had previously been assumed to as part of the settlement of their lawsuit with Sabre two years ago. But that’s just the tip of the tidbits.

We are also talking about why it is that ALPA, United, American, US Airways and Delta are fighting Air Norwegian’s latest expansion efforts into the U.S.

We finish up our look into 2014 and what we see as important, and we also talk about the attempt by TWU to get a restraining order against Southwest Airlines, after the airline declared an “emergency” concerning sick leave. Yep, you know the situation we’re talking about. The meltdown at Chicago’s Midway Airport earlier this month where a large number of Southwest’s baggage handlers apparently didn’t show up for work. The judge here in Dallas refused to rule, said the matter was something for arbitration.

On the stock front, it was a so-so week, with shares of Air Canada taking the top spot and shares of Bombardier at the bottom. (The announcement that Bombardier’s CSeries aircraft rollout has been delayed, for the fourth time, did not make investors happy.)

This week we are heavy on labor-related news and commentary. American Eagle and its pilots came to a tentative agreement not too long after we published last week; U.S. District Court judge Roslyn Silver finally ruled in the US Airline Pilots Association Addington case. She also ruled on whether or not former America West pilots are entitled to a seat at the table in the American Airlines’ pilot seniority discussions.

She also, in no uncertain terms, made her displeasure at the antics of USAPA’s attorneys quite clear. We have a link to her complete ruling in this week’s issue.

Meanwhile, as part of her ruling, Judge Silver advised that USAPA had to remove itself from any seniority discussions as soon as the group is no longer the bargaining agent for the airline.

In a related move, the Allied Pilots Association at American Airlines held their board meeting this week and filed a request for single carrier status with the NMB.

Then there is that lovely dysfunctional bunch up in Chicago. No, this time I’m not talking about management at United Airlines. I’m talking about the Association of Flight Attendants, the union that represents the flight attendants at the airline.

This week United announced that it would be forced to furlough hundreds of s-United flight attendants, as voluntary efforts to bring down the airline’s FA headcount had not succeeded in generating enough response. The United operation is still overstaffed on the FA side.

The company was forced to make this decision to go with involuntary furloughs, which it did not want to do, only after AFA essentially refused the company’s fourth offer to provide for a “crossover” that would allow s-United flight attendants to move to the Continental Airlines side of the operation.

Well, actually they didn’t refuse outright. They just insisted on onerous conditions such that the airline couldn’t agree to a crossover.

United has actually asked AFA to do this four times now. FOUR. AFA allowed it to happen once. And by all accounts, those who made the move are happy they did so.

We give you our take on why we think it is that AFA labor leaders at United don’t want more crossovers.

A hint: the union is hurting its own members in an attempt to keep its political turf intact.

In other news, Brett Snyder, PlaneBusiness contributing editor, is back this week with another Cranky Analysis column. This week he digs into the data to see just how bad a holiday season Southwest Airlines experienced. The results? It was bad. The airline suffered serious operational issues systemwide. We give you the data. And then some.

Lots of news this week concerning American Airlines and US Airways. They will begin phasing in codesharing next week, and the airlines announced which routes the two are cutting, as a requirement of the DOJ slot divestitures at DCA and LGA. We like the decisions they made.

Oh, and then we had a Southwest Airlines plane land at the wrong airport. But you already know all about that.

It was a good week for the airline sector last week, and analysts continued to fine tune 4Q13 estimates this week as earnings will start rolling out next week.

We also have the November DOT Air Consumer Travel Report numbers. They look very much like the October numbers. We’ll tell you who was naughty and who was nice.

This week we try to regroup from the last three weeks of too much food, too much food, and well, too much food. Meanwhile, over the last week the airline industry has tried to recover from too much cold, too many passengers, and too much snow. Yes, it’s been a tad nasty out there. For those of you who live in Chicago, our deepest condolences. When the fuel and the glycol freezes, there just ain’t a whole lot else you can do but wait it out. At least the city has great restaurants.

This week we do, of course, talk about the weather-related issues that affected the industry over the last week. In addition the new FAA FAR 117 regs went into effect on Jan. 4. There was some whining from some airlines this week claiming that the FAR 117 changes were making recovery that much more difficult — and I’m sure that is true to an extent. But most airlines did a pretty good job at getting their operations back up and running. With one glaring exception.

That exception of course was JetBlue. The airline was forced to essentially shut down operations on the East Coast this week, as the airline’s operations collapsed under the weight of, well, having a route structure that is heavily weighted to the East Coast.

Some airlines did better than others helping passengers with cancelled flights, and once again, the importance of Twitter and its place as a “go-to” way to directly connect with someone at an airline who can help a passenger is becoming more and more obvious.

Phone lines to most airlines were jammed — but some airlines did much better than others at helping passengers directly using social media. We talk more about that this week.

Of course, this week is our big year-end issue in terms of airline stock performance as well. We look at the three airline stocks that notched triple-digit gains in 2013, we look at the winners from the fourth quarter, and of course, we pay homage to the bankrupt shares of AMR Corp. When trading was finally halted in the shares in December, prior to the switchover to AAL shares, the gain for the year exceeded 1300%.

History was made. We’ll never see anything like this again. Not in any other bankruptcy. (And I’m not just talking airline bankruptcies).

We go over the latest DOT Air Consumer Travel Report Stats for the month of October that were released while we were on hiatus. Short and sweet? Delta Air Lines maintained its position as king of the legacies, and Southwest and AirTran continue to struggle as the two airlines attempt to merge their operations.

What will we see happen in 2014? We put the Karnak hat on and give it a shot. This week we talk about the three big guys. Next week — we’ll tackle the rest.

Meanwhile, it’s crunch time at American Eagle. The regional carrier of American Airlines, which is now just one of the regional airlines serving American Airlines announced in December it is changing its name and its logo. Meanwhile, this was all announced as pilots at the airline and management continue to attempt to negotiate a new tentative agreement.

Negotiations were scheduled for this week but as of now, I have not heard any news yay or nay. We know the playbook here. Too many regional airlines chasing too few opportunities means the major players are now calling the shots. Same here. Management says it has to have more concessions to bring costs in line with other regional providers.

All this, the 100th anniversary of commercial air travel, our opinion on the “tail vote” at American and much, much, more in this week’s issue.